While the data and information contained in Financial Revolution has been obtained from sources believed to be reliable, the authors do not warrant or guarantee that any data or information is accurate, complete, or timely.

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I made a quick stop at the Silk Market in Beijing to pick up some gifts for colleagues back at the office (Pashmina shawls for $2.25). The Silk Market - formerly Silk Alley comprised of small shacks creating little alleys of knock offs - is in a shiny new building where you can buy pearls, clothing, silk items, electronics, and more. With a little bargaining, shoppers are picking up North Face jackets ($18), Louis Vuitton bags ($4), Hermes scarves ($1.50), DVDs ($1). Of course, they aren't authentic. Occasionally the government cracks down on the knock offs, but brands and intellectual property are seldom protected in China.

The limited attention to intellectual property rights (IPR) hurts businesses that own the brands. As a result, many companies are cautious about entering the Chinese market. This is a loss for consumers and businesses in China as well as the owners of the intellectual property.

There are, however, some signs of hope. The government owns the Beijing Olympic logo and they have been relatively quick to crack down on non-licensed products. In addition, large Chinese companies are starting to develop internationally-recognized brands - Haier, Huawei, Lenovo. These companies are spending significant resources to build their brands and they want protection from infringement.

But the problem for China's economy is not just IPR, it is a lack of innovation. China is the assembly plant for the world's goods. There is very little innovation or product improvement happening here. If China can transition to a country of innovators they will add greater value and earn more revenues. It can also create more opportunity for the educated Chinese middle class. That may in turn solve the IPR problems. If China has in-country brands and technologies it will be in the interest of the government and industry to protect it.

There was a time that "Made in Japan" meant a product was junk. Japan moved past manufacturing cheap, low-quality products to providing innovation. Today, "Made in China" is often associated with products of questionable quality. Will China follow Japan's lead and move to higher value added manufacturing? That is the critical question to China's long-term economic growth.

Air pollution has been a major problem for China for many years. A decade ago the problem was people burning coal in their homes. Today, in most large cities the residents use electricity instead of coal and they use it not only for cooking and heating, but to power their TV, stereo, PC, appliances, and more. As a result, the coal burning has simply shifted to from millions of households to large power plants. In addition, the number of vehicles on city streets doubles every few years.

The result of this explosion in energy demand is obvious to anyone who visits Beijing, Shanghai, Guangzhou, Hong Kong, or Xi'an - pollution! Today's pollution in Beijing reached an index value of 500 (it was probably higher, but the index doesn't go beyond 500.) At that level, concentrations of pollution are more than four times the levels established by the World Health Organization.

In addition to the obvious health effects, the pollution is a significant drag on the Chinese economy. World Bank reports estimate that 8% of GDP is lost every year because of pollution. This is due to damage to productivity (worker illnesses and death), buildings and crops, and a number of other effects. It is also affecting the appeal of Chinese cities for foreign investors.

The Financial Times had an article last week announcing that Hong Kong's ranking as a desirable place for foreigner's to live fell sharply because of pollution. That means companies are deciding not to invest in Hong Kong because their HQ employees don't want to work there. Looking at the picture above of today's air quality at Tiananmen Square in Beijing, it isn't hard to see why people might think twice before moving their family to a "smoke-filled room".

The Chinese government is stepping up efforts to address the pollution problem. Especially as 2008 and the Olympic games in Beijing come closer. However, the task is Herculean and the Chinese national environment agency is small (it numbers less than 300 employees for the entire country.) But the State Council declared that the 11th Five-Year Plan will place great emphasis on reducing pollution (the goal is 10%) and increasing energy efficiency (the goal is 20%).

The problem doesn't only affect China. Pollution from China (and India) travels to the US and, in some places, has a significant impact on air quality. More than 40% of mercury pollution in the US comes from China. It is in the US's interest to promote cleaner, greener growth. And while the opportunity is huge for US companies that produce pollution control devices and energy efficient technologies, many companies have only a minor presence or stay out all together due to concerns over intellectual property.

Pollution will continue to be a major drag on the Chinese economy for years to come. I am, however, optimistic that public desires, both domestically and internationally, for a higher quality of life will force government and industry to work toward better air quality. I only hope it comes soon.

For much of the past decade, China has been the world's manufacturer due in part to a large supply of very cheap labor. As the demand for Chinese labor has grown, however, the supply has not. In many of China's major manufacturing centers there are persistent labor shortages. According to the New York Times, "shortages at hundreds of Chinese factors have led experts to conclude that the economy is undergoing a profound change that will ripple through the global market for manufactured goods."

The shortages are attributed to government policies that encourage people to continue farming instead of moving to the cities, rapid expansion at many factories, a demographic shift due to the one child policy, and more young people receiving advanced educations (an engineering graduate doesn't want to assemble hair brushes on a factory floor.) Experts estimate that major export industries are looking for over 1 million additional workers.

As demand grows and supply remains flat or declines, the obvious happens - wages and benefits increase. Having visited many Chinese manufacturing sites, trust me when I say this is a very good thing. There are two outcomes of the growing wages. First, companies seeking to minimize costs will shift to other low-wage countries such as Vietnam. For those that stay, they are creating a larger middle class in China; a middle class that will buy goods produced domestically and internationally. Workers and their families can then pursue opportunities beyond simply providing unskilled labor to assemble your next pen, computer, or bunny-head slippers.

The labor shortages are causing companies to move inland, away from the major manufacturing centers in Guangdong and Chongqing. Some are even moving out of China completely. This challenge, should it continue, could help China transition from a low-cost labor supplier to a country with a professional, educated workforce and a consumer-driven economy. Keep your eyes open.

Over the past few years there has been a lot of newsprint and political spin about the rise of the Chinese economy. By anyone's accounting, China's GDP has been growing rapidly and the standard of living, as measured by financial values, has increased markedly for urban residents in Eastern China. However, there are some clouds on the horizon...

China's explosive growth has been fueled in large part by access to cheap resources - labor, energy, capital, and materials. Eventually, the cost of those resources will climb and China will no longer be the low-cost leader. In the next series of posts, I plan to explore several challenges that could affect the future growth of the Chinese economy.

Welcome to the 17th Carnival of Investing, direct from China. The Carnival presents an opportunity for bloggers to share their best recent posts on investing. If you’re interested in contributing a post to the next carnival, you can use the form at Blog Carnival or Conservative Cat.

Due to limited Internet access in China, I was not able to read all the posts, so I have provided the description from the submitter. Next week's carnival will be hosted by Blueprint for Financial Prosperity. And now, on to the posts…

Jose at Stocks for Me presents Coca Cola’s Director’s PayHow Coca Cola Director's foiled the investors by making them believe they tied their compensation to company performance -- just after giving themselves a 40% raise.

Abnormal Returns at Abnormal Returns presents Natural hedgesWith the risk of higher oil prices this summer looming we discuss how a well-designed portfolio can provide a "natural hedge" against the higher costs of driving.

For those of you that weren't able to take advantage of the free USB drive from Microsoft, LPL Financial Services is offering a free USB drive that contains a study showing why they're the number one independent broker/dealer. All you have to do for the drive is call (1) 866-523-8218 and ask for a free copy of the "Moss Adams study" and other information on a free memory stick.

I haven't tried this one, but it might only be open to financial advisors or others in the field. Let us know if it works/doesn't work for you.

UPDATE: Paul left word that LPL will only send the USB drives to financial advisors. You are, however, welcome to request a (emailed) study. You might have better luck with the Microsoft USB drive.

Have you ever played one of those claw games? You know the ones - you stick your dollar in the slot and get a dose of frustration as you navigate the little claw to your prize only to find the claw is too weak to actually hold the prize all the way to the chute. Well, this kid wasn't having any of that. Devin, a 3-year old Minnesota boy, climbed through the chute to his own personal playbox. Firefighters had to rescue him (although he didn't want to leave.)

I guess the personal finance lesson is that even children will do anything to save a buck!

I learned last night that my China business trip has been extended an extra week (I usually only stay 2 to 3 days on a normal China trip.) Since I'll be there for two weeks, I thought I would try something a little different... I will report on my experiences in China. Stay tuned for the first report on Tuesday.

On a different note, I've had several spam commenters over the last month or so. Unfortunately, Google indexes my pages faster than I can remove the comments. Everytime that happens, Financial Revolution's Google pagerank drops to zero. Until I find a good solution to this problem, I'm going to use comment moderation. I still encourage/ask people to comment on the posts - I learn a lot from you - but keep in mind that it might take a day or two for your comments to appear on the post. Please bear with me while I attempt to address this issue.

Convenience - no need to carry around large sums of cash for those big purchases.

Budgeting - each month you receive an itemized list of your expenditures.

Boosting creditworthiness - building a good credit history makes you more attractive to lenders when it comes time to buy/refinance your home.

Charging today, paying next month - if you pay off your balance each month, you get to borrow the credit card company's money for free (at least for the time between the charge and the payment due date).

Negotiating better deals - Credit card companies are often willing to negotiate their rates or fees.

Teaming up with a corporate titan - Many cards offer purchase protection and will fight for you when there is a dispute with a merchant.

Protecting you from thieves - You are generally not liable for fraudulent charges (after the first $50) on your credit card.

I find this list helpful, but I think some changes are necessary. First, the negotiating better deals is a weak argument because the alternative might be not having a card at all (i.e., no annual fee or interest rate). Also, the last item is somewhat ironic. Although they do usually protect you from fraudulent charges, the credit card companies loose practices are one of the reasons ID theft is so common. Finally, I would add the following perks:

Improving travel experiences - have you ever tried to rent a car without a credit card? Reserve a hotel room? Next time you buy your airline ticket in cash, prepare to spend some extra time talking with security.

Insuring you on the road - most cards now offer insurance coverage for theft of or damage to most rental vehicles.

What do you think? Are there other perks that you feel should be added to the list?

Companies will offer some good deals, but end/modify the deals quickly

Fees will grow

Credit card companies will continue to consolidate and, over time, reduce competition

Micropayments are the next frontier

Personal data will still be vulnerable

The article also provides some tips on how to take advantage of each of these trends. The short and sweet version is this: pay off your charges in full every month, read your statement carefully and look for fraudulent activity, and maximize your rewards.

It's time to confess... I made a mistake last year. I tried a small experiment with the dogs of the Dow - investing in the six highest-yielding stocks in the Dow Jones Industrial Average and selling after one year. Historically, this approach bests the performance of the Dow by about 50%. The results for my holding period were not stellar - about a 0.5% gain after commissions.

My mistake, however, was selling all the positions after one year. By holding them for more than 365 days, the gains/losses were considered "long term" for tax purposes and taxed at 15%. I should have sold the losing positions in SBC Communications and Verizon Communications a week earlier for a short term loss. Making this little change would have yielded a loss that could be deducted from my short-term gains that are taxed at just shy of twice the long-term rate. Here are the options expressed as formulas:

Tax savings from selling short-term losses = loss X 0.28 tax rate

Tax savings from selling long-term losses = loss X 0.15 tax rate

Which do you think is the better option? Fortunately this was a small-money experiment, but it provided a valuable lesson: sell your losers short term and your winners long term (if at all.)

Update: As THC points out below, if you have net short-term losses, they can be used to offset net long-term gains. If the end result is a net loss, you can use up to $3,000 per year to offset ordinary income (you can carry over any excess losses to future years.)

The McKinsey Quarterly recently included a web-only article on ten trends for the coming years. I thought it would be worth reviewing these trends and looking to see if it yields any areas for possible investment.

Trend 1: Economic activity will shift to new regions of the globe as Asia continues to grow.Investment ideas: Consumer companies with a strong presence in Asia and global REITs.

Trend 2. Public-sector activities will balloon, making productivity gains essential. The unprecedented aging of populations across the developed world will call for new levels of efficiency and creativity from the public sector.Investment ideas: Consultants that provide services to government agencies.

Trend 3. The consumer landscape will change and expand significantly. Almost a billion new consumers will enter the global marketplace in the next decade as economic growth in emerging markets pushes them beyond the threshold level of $5,000 in annual household income—a point when people generally begin to spend on discretionary goods.Investment ideas: Consumer & luxury goods companies with a strong presence in Asia.

Trend 4. Technological connectivity will transform the way people live and interact.Investment ideas: Internet companies.

Trend 5. Ongoing shifts in labor and talent will be far more profound than the widely observed migration of jobs to low-wage countries.Investment ideas: Outsourcing companies in India, China, and other places with educated talent.

Trend 6. The role and behavior of big business will come under increasingly sharp scrutiny.Investment ideas: Socially responsible companies.

Trend 7. Demand for natural resources will grow, as will the strain on the environment.Investment ideas: Water filtration, pollution control, and energy companies.

Trend 9. Management will go from art to science. Today's business leaders are using highly sophisticated software to run their organizations.Investment ideas: Corporate software (e.g., SAP) and business consulting companies.

I was going through my email and noticed a sale announcement for Investment Advisor. They are having an online warehouse sale on finance and investing books. The shipping isn't great ($4 for the first item and $1.79 for each additional item), but some of the books are priced as low as $0.89.

Last weekend, I rented a car from Alamo. As usual, I requested an economy car - typically a Geo Metro-sized car. I am certainly not a frequent car renter, but of the past 7 to 9 rentals in which I requested an economy car, I have never received one. Why? Well, I don't believe they even own (m)any economy cars. When I get to the rental counter, the discussion usually goes something like this:

Agent: I see you have an economy car. Our economy cars are Geo Metros and they don't provide much space. Would you like to upgrade to a mid-size sedan for only $15 more per day?

Me: No thank you. It's just me and I don't need much space.

Agent: The mid-size cars also handle much better and the weather report is calling for rain.

Me: Thanks, but I'll stick with the economy.

Agent: Hmmm. It appears that the economy cars are all out at the moment. I'm going to put you in a Chevy Impala at no extra charge.

Me: Thank you.

It never fails; we go through this same dance every time I rent a car. Has anyone had a different experience?

While we're on the topic of real estate, the Seattle Post-Intelligencer had an interesting article about a potential boom in foreclosures. According to the article, over the last two years, many borrowers have taken advantage of adjustable rate mortgages (ARMs) with super-low teaser rates (2.5% or less.) Because some lenders were offering no- to little-money-down loans and some real estate markets have cooled, some of these buyers owe more on their house than its current market value. First American Real Estate Solutions estimates that approximately $200 billion in foreclosures will result (although they don't state over what time period.)

Once an ARM's introductory period ends, the homeowner's monthly payment will increase dramatically. Some payments will double overnight. Think what effect a doubling of your mortgage or rent would do to your budget! Unfortunately, the homeowners won't have the most common solutions available to them - refinance or sell the property - unless they can cover the difference between the loan amount and the lower value of their property.

The NY Times had a very interesting article about investors buying houses over the Internet sight unseen and (surprise, surprise) getting burned. The article describes the case of two investors who bought three houses in Buffalo, NY for a total of $13,000. The investors believed the seller's statement that the houses needed only minor repairs (really?) You can probably guess that those statements weren't quite accurate.

In the end, the investors lost the properties to the city - unpaid taxes - the city is billing them for the cost of razing the homes (the buildings are safety hazards), and one of them had to file for bankruptcy.

While I feel sorry for the buyers, I can't help but wonder who would think they could buy a structurally sound, much less habitable, home for under $5,000. Caveat emptor!

Over the last few months I've seen numerous magazines and newspapers claiming that the U.S. real estate bubble is beginning to burst. At a minimum, the air is leaking out. U.S. homes are staying on the market longer and buyers are starting to regain their common sense.

So what does this mean for real estate investment trusts? In January, I posted that REITs offer diversification because their prices don't move in tandem with the general stock market. Fortunately, however, not all property markets are as pricey as the U.S. For a number of reasons, real estate markets in Asia and some European countries have lagged the U.S. by a considerable margin. But the economies in these places are strong and the outlook for their property markets (in dollar terms) is good.

It's interesting to note that five of the seven top performing real estate mutual funds (3 month returns) were international. Obviously the cat is out of the bag on this one. That said, I think two funds still look attractive - Fidelity International Real Estate (FIREX) and Alpine International Real Estate Equity (EGLRX). Both are no load and carry a satisfactory fee of 1.26% and 1.18%, respectively. The Fidelity fund emphasizes Asia and the Alpine fund has a slightly broader reach, but focuses on residential properties.

On one hand the high level of M&A activity signifies the strong level of investor demand for property while the expansion of the Initial Public Offerings (IPO) for publicly traded real estate companies demonstrates the amount of capital available for attractive investment opportunities... In our opinion, this is a potential tip of the iceberg, if private property companies around the world seek greater participation in an expansion of property investment, dominated by the capital markets.

Throughout the sixteen years that we have managed this Fund, there has never been so much interest or activity in and among international property stocks. REITs are part of the story, as is the global yield shift. Perhaps the most important elements are the perceptions that foreign real estate markets may offer greater potential upsides than our own and that real estate is well positioned for solid performance in this business cycle. That is our view, as well.

I guess the key question is whether or not we're too late to the party?

As I was exiting the Metro station this morning, I received a copy of the Financial Times with a note that the newspaper is providing free access at FT.com from March 5 to 11. The newspaper's business articles are usually top notch and it's a good place to find investing ideas. An extra feature: unlike the paper version, the background of the web site is white, not pink.

The article compares three popular tax packages: TaxCut, TurboTax, and TaxAct. Each of the packages provided different results - TaxCut calculated a return of $600, TurboTax: $588, and TaxAct: $175. So which package does the journalist recommend?

Certainly not TaxAct.

Between the other two, I found TaxCut more informative and, pardon the jab, a bit more intuitive. And don't forget the additional $12 in refund it calculated.

Based on my experience, I would agree with the journalist's assessment. I started out using TaxAct this year and I was not pleased with the final results. In addition, I found some of the language confusing and the documentation, well, lacking (then again, the software was free.)

I then used TaxCut. I've been a satisfied user of TaxCut for a couple years so I was comfortable with the user interface. While I still wasn't pleased with the results, TaxCut did a better job handling my bond investments and explaining the AMT calculations (did I get hit hard by that one!) I'd also give TaxCut better marks for handling my K-1 forms (from an investment club.)

I didn't have a chance to try TurboTax this year, but my cousin gave me the lowdown. She's an accountant and decided to try the software route this year. She wanted to compare TaxCut and TurboTax so she'd be able to recommend one or the other to her clients (why an accountant would tell her clients to use software and bypass her services is beyond me.) She started by doing her return by hand and then using each package. She found that TurboTax was close to her hand-prepared return while TaxCut was way off - indicating she owed money instead of getting a refund.

I don't know if there's a moral to this story other than a) nothing makes doing taxes fun and b) our tax code is so complex that software just can't handle it (maybe that's what my cousin was trying to prove!)

The Insurance Information Institute is offering free software to help you develop an inventory of your possessions. Using the software, you can organize your possessions by room and attach photos and electronic copies of receipts. I haven't personally used this software, but it looks simple to use and has all the important features. If you've used the software, please post a comment sharing your experience.

Last week, the Washington Post reported that government officials are seeing a new IRS-themed email scam each week. Most of the scams involve an email advising that the recipient is under investigation or due a refund. The emails contain links that direct the recipient to a phony, IRS-look-a-like web site that asks for personal data.

Five Cent Nickel dissected one of these scam emails several months ago and commented that it was one of the most convincing scams he had seen. These scams are likely to proliferate not only because taxes are on everyone's mind this time of year, but also because the pool of victims is larger than for other scams (e.g., PayPal, MBNA).

If you see one of these emails, it's important to remember that the IRS doesn't send unsolicited emails. (When was the last time the IRS asked for your email?) The consumer alert on phishing, ID theft and scams on the IRS site advises:

Be skeptical of communications you receive from sources you are not expecting. Verify the authenticity of phone calls, standard mail, faxes or e-mails of questionable origin before responding.

Do not reveal secret passwords, PINs or other security-based data to third parties; genuine organizations or institutions do not need your secret data for ordinary business transactions.

Do not click on links contained in possibly questionable e-mails; instead, go directly to the site already know to be genuine. For example, the only address for the IRS Web site is www.irs.gov — any other variations on this will not lead to the legitimate IRS Web site.

Do not open attachments to e-mails of possibly questionable origin, since they may contain viruses that will infect your computer.

There is a continual debate among bloggers and personal finance sites asking whether it's better to hold individual stocks or trust mutual fund managers with our money (see funds vs. stocks.) Often, those recommending mutual funds argue that funds have experienced money managers, proprietary research, and access to company insiders - things many of us lack - so it would be foolish to think that we could do better by investing in individual stocks.

While it's true that funds have more resources and greater access to information, they also are faced with a huge challenge: too much money! The average large-cap mutual fund has more than $1 billion in assets. If the manager of one of these funds wants to create a portfolio consisting of their 10 best stock ideas, they would have to invest more than $100 million in each company. Since the manager won't want to own more than 10 percent of a company's outstanding shares (for both legal and liquidity reasons), that means only companies with market caps of $1 billion or more - less than 10% of the market - are potential investments. If the manager expands their search to companies with lower market caps, the manager must hold even more stocks.

When the manager is picking stock number 20, 30, 50, or 200, they are purchasing the investment because of the dollar size of the portfolio, not because the last picks are as good as the first or because they are necessary for diversification. So, mutual fund managers must find more good stock ideas from a smaller universe of investments and buy and sell large volumes without influencing the share price. When you tack on administrative fees, it's no wonder that most mutual funds underperform the market or become stealth index funds.

Fortunately, as individual investors, we don't face those same constraints. For people without the time or interest to research stocks, mutual funds can be a good alternative (particularly low-cost, no-load index funds.) For others, creating a portfolio of their six to ten "best ideas," perhaps with some portion of the portfolio in an index mutual fund or exchange-traded fund, will create opportunities to beat the market over the long run.

A Financial Revolution has joined the PFBlogs.Org network. PFBlogs is an aggregator with a deep bench of over 240 excellent personal finance and investing blogs. The site includes a search feature so you can check out which blogs have been talking about Joel Greenblatt's "magic formula".

I encourage you to check them out. They're a great resource for readers interested in personal finance and investing. (Please note there is a link to PF Blogs on the sidebar under "Recommended Blogs".)

Last night I finished Joel Greenblatt's new book, The Little Book That Beats the Market. It's a well-written, easy-to-understand, funny and short book that promotes a "magic formula" which has beat the market by a wide margin over the last 17 years.

The simple formula identifies businesses that are well-run (high return on capital) and selling at a bargain (high earnings yield). According to the author, if you invest in the top ranked 20 to 30 companies each year, you will top the market averages over the long term. Why 20 to 30 companies? Because some of the companies are bargain priced for very good reasons so the goal is to identify stocks that on average will rise faster than the market. An investor following the formula would simply buy the top ranked 20 to 30 companies every year without ever reviewing a financial statement or even considering the future prospects of a business. Mr. Greenblatt even provides us with a list of the formula's top ranked companies at magicformulainvesting.com (currently free).

While I recommend the book and believe the formula has merit (based on past results), I think Mr. Greenblatt failed to discuss one important criteria: minimum portfolio value. How much money would I need in order to follow this formula? Buying and selling 30 stocks every year is an expensive proposition. If we assume a transaction costs $20, that would amount to $1,200 per year in transaction fees. On a small portfolio, say $25,000, the transaction costs would cut your return by a full 5% each year and, assuming the costs are paid from the $25,000, reduce the amount you have to invest. Most of the articles and books I've read suggest keeping transaction costs to below 1%. Using that guideline, an investor would need at least $120,000 to follow the magic formula (less if the investor used a cheaper discount broker.)

I don't plan to adopt the automatic magic formula approach (i.e., buy the 20 to 30 top-ranked stocks every year), but I do hope to use the suggestions in the book for stock ideas and to better evaluate the stocks I research.

Microsoft wants to teach you about software licensing and they're willing to give you a free USB drive as part of the training. If you surf on over to their Mystery Solved page, you can register for a free USB drive (no info on size) that includes FAQs, a Windows licensing guide, product info, and other resources.

After you diligently read all the materials on the drive, simply erase the files and you have yourself a handy portable storage device.

In his book, You Can Be a Stock Market Genius, Joel Greenblatt reviews a number of special situations that provide opportunities for significant profit potential. Mr. Greenblatt also tackles the question that every stock investor asks - how many stocks do I need to own to have a well diversified portfolio?

The objective of diversification is to reduce the portion of a portfolio's risk not attributable to the stock market's overall movements. Examples of this type of risk include when a product line doesn't sell well, a company cooks the books, or a company misses earnings. Based on statistics, owning two stocks reduces this risk by 46%. Four stocks reduces nonmarket risk by 72%. Eight stocks cut your risk by 81%. Sixteen gives you 93% protection, 32 provides 96%, and 500 cuts your risk by 99%.

The result: Once you own eight stocks in different industries (and that part is key!), the benefit of adding more stocks in an effort to reduce nonmarket risk is minimal.

But what about reducing market risk? Adding other types of investments that have a low correlation to the stock market - REITs, preferred shares, royalty trusts - can help you cut market risk.

Every month, the University of Michigan's Tozzi Financial Center compiles a list of 100 stocks that "can blow holes in your portfolio." The list is built by analyzing value, momentum, quality, predictability, and "other" factors. The list isn't always right on, but it has a good track record. If you own one of the stocks on the list, I would advise doing some additional due diligence.

The Center's other monthly report is the Value 40. Again, the record isn't perfect, but it's a great place to look for investment ideas.

The Internet has brought us many great things (including A Financial Revolution). One of the benefits of the Internet is the ability to research products and prices with a few keystrokes and clicks. Comparison sites like Price Grabber, Epinions, My Simon, and others allow consumers to read reviews from people that use the product or service and helps compare prices at leading (and lagging) online stores.

Since I’m in the market for a GPS navigation system, I decided to compare the comparison sites. Here are the rules: I searched for the Garmin StreetPilot i5 on each of the sites, rated the sites on three factors – ease of use, lowest price, and other features (e.g., reviews, price alerts) – and then averaged the ratings for a final score.

Included results for other products as well as ridiculously low prices

Overall, there wasn't a great deal of difference between the sites scoring 3.5 or better; it generally came down to ease of use (e.g., how hard was it to sort on price including shipping.) I wanted to try the price alert feature so I set up a price target of $345 on both NexTag and Yahoo! Shopping. Now I wait...